Vlad’s Big Short Squeeze Trade
Hi everyone and welcome to the Yellow Tunnel community, an aggressive short-term trading service dedicated to all classes of traders seeking to elevate their trading skills, market awareness and trading profits.
This past week, the market has been dominated by high-profile earnings and the Reddit community making a crusade of squeezing the most heavily shorted stocks available in companies that were all but left for dead a couple of months ago. Now, there are over six million accounts at Robinhood that own GameStop Inc. (GME) and are pushing the stock to new all-time highs which have triggered a tsunami of short-squeeze scenarios.
This is just another fascinating outcome of the pandemic economy we all live in and to see this David versus Goliath battle raging between the millennial investors and the mighty hedge funds is just wild. Most of us market pros have never seen anything like this before other than the mania during the dot com days.
What is getting lost in the fray of the “kill the hedge funds” crusade is how many feature companies have reported lights out fourth-quarter earnings, the most impressive being from Microsoft Corp. (MSFT) that saw its share trade to a new lifetime high. But there was a great deal of bullish expectation built prior to earnings season kicking off, and now we’re seeing some well-deserved selling on the news.
NEW WEEKLY POWER TRADER SERVICE
We recently launched our new Weekly Power Trader service that we at Yellow Tunnel are very excited about. Each week on Sunday, our expert traders use our AI Tools to provide the Top Bullish and Bearish Stocks, each with an Entry Price, Target Profit, and Stop Loss.
Also, note that the Weekly Power Trader signals are meant to last for 5-10 days as long as the vector confirms the same direction as the original pick, for stocks we use a target gain of 2% and stop as 2% of the stock price.
Signals have averaged over 75% accuracy in my live trading since inception. Sometimes we hold position 2-5 days by using options (selling OTM BULLISH PUT spread) and targeting 1% target gain and 1% stop loss using stock price. Green color should be interpreted as a bullish signal and Red color as a bearish signal.
CURRENT TRADING LANDSCAPE
We moved into our current house nine years ago. It’s only been nine years and everything is already breaking, obviously all at once. It used to be that things would be manufactured with longevity in mind. Cars lasted for years, so did refrigerators and ovens. Companies took pride in the longevity of their products, often using it as a way to advertise and promote.
Then, most manufacturing moved overseas and it became a lot more cost-efficient and profitable to make crap. Apparently, as I am being told by a handful of repairmen, I cannot expect anything to work for more than 10 years. Believe it or not, the ice maker in my 30-year-old fridge, left here by the previous owners has outlived the new ice maker purchased by me less than a decade ago. Now I am just waiting to see what’s next.
The SPY rebounded today from oversold levels at $371 level and was not able to break overhead resistance at $381. Short-term the range is now defined as between $371 and $38. Based on the futures data, the market will open to the downside and can potentially retest recent lows (371) tomorrow or next week.
The key support remains at $371 (worse case $364. Values stocks (JPM, CVX, etc.) are approaching bullish entry levels (50 days MA). The bulls have been losing momentum and I still expect up to a 5% correction in early February.
The bull market has resumed its long-term rally and will continue to make new highs into March-April. I would be a buyer using any short-term corrections and use dollar-cost averaging strategy to accumulate positions. If you are trading options consider selling premium with April and May expiration dates.
"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $373 level using SPY and "SELL" signal is at $381 for short-term traders. Based on our models, the market (SPY) will trade in the range between $364 and $390 for the next 4 weeks.
How To Use Our Signals
Once you become a member, I encourage you to review our Live Trading Room recordings to see how I trade Aggressive Power Trader signals in my account. A snapshot of how we produce our Live Trading Room Sessions shows how we pack in a lot of information that can be accessed from whatever device your driving.
As a reminder, consider buying near the "BUY" level with a "10 days prediction" higher than the close price. In our live trading room, I usually hold a position for 1-2 days.
I allocate less than 5% of my portfolio if the position is being held overnight. On average, less than 1% of the portfolio should be at risk, if you own a position for less than one day.
I enter a position at the predicted LOW (BUY) price or yesterday's close price. My stop loss is 1% and my target gain is 1% of the stock price. I target 75% accuracy using these signals.
Few subscribers asked about Options trading using the signals provided. Please review live trading room recordings. I often sell OTM credit put spread using weekly options and collect 0.5% using stock price. For example, if the stock is trading at $100, I would sell OTM put (strike less than 100) with option BID price close to $0.5.
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SECTOR SPOTLIGHT
The mania surrounding GameStop Inc. (GME) is spilling over into many of the specialty retailers that are also attracting huge attention from the short-squeeze herd. Bullish momentum is broad and volume is surging with each day this situation stays fueled by social media and the Reddit community.
The SPDR S&P Retail ETF (XRT) reflects the excitement of the trading universe over the names of the companies that occupy the top ten holdings. These are not your household top-shelf retailers but rather a smattering of second-tier companies, some of which have considerable amounts of their floats short.
Here at Yellow Tunnel, we apply proprietary trading models constructed with artificial intelligence that I’ve spent several years developing. One of the primary tools we utilized is the Seasonal Chart, which provides levels of bullish and bearish probability for the next 20, 20, 40 and 50-day periods.
The indicators are back-tested for several years. In the case of XRT, we go back to 2006 where the data generated has an 88% correlation with the price action of the underlying stock. This is the kind of exacting science we put to work with every trade recommendation provided day after day.
Based on the current Seasonal Chart, shares of XRT are clearly overbought on a very short-term basis but will present an excellent trade from the long side sometime over the next two weeks. The uptrend is steepening, so don’t miss out on this trading opportunity when our indicators to signal to buy-in .
TRADE OF THE WEEK
Within the hot retail space, I prefer to work with a stock where the fundamentals are showing signs of improvement and sales trends are picking up momentum. One of the companies that have caught my attention for a few reasons is Macy’s Inc. (M). This is a company, like many, is having to transform itself from predominantly brick-and-mortar to a digital eCommerce business model.
Macy’s will close 45 stores in 2021 and continue to drive its online presence that should result in a ramp of top and bottom-line results. Jefferies turned positive on Macy's with an upgrade to a Buy rating back on December 18 after having the department store stock set at Hold.
The firm noted, "We believe forcing rotation from mature, low growth brands into a more growth-focused portfolio is a necessary catalyst and as a blue-sky scenario, Macy's becomes a desirable partner for hyper-growth direct-to-consumer brands seeking to roll-out immersive boutique experiences."
Applying our proprietary AI-driven Forecast Toolbox to Macy’s stock, we get a bullish “A” Model Grade rating with a Predicted Resistance price target of $22.07. With the stock trading at around $15.30, that’s an implied move higher of 44%. That’s quite a rally forecasted for the next couple of weeks, and given 32% of the stock’s float it short, it might be just a matter of a few days in this manic market.
When viewing the six-month chart of Macy’s, it is pretty obvious the stock is caught up in the fray of the short-squeeze sensation, and may not pull back much further towards the $14 level as would normally be the case under normal market conditions. But these aren’t normal times and the market is enduring some abnormal influences.
However, similar to the XRT chart, the angle of bullish momentum is steepening in a notable manner and should be on trader’s radars as an excellent set up for playing the stock from the long side in days and weeks ahead.
This is what AI does for our subscribers, it identifies, clarifies and verifies high-quality trades. By being a member of Weekly Power Trader, it is these kinds of opportunities that our AI-driven platform provides our members to look forward to every day they put their risk capital to work on both long and short positions.
Our Weekly Power Trader advisory service takes positions in only blue-chip stocks and ETFs that are “green lighted” by my proprietary AI tools, and when confirmed, are added to the portfolio with my investment capital as well .
Trading Thoughts: consider buying near the "BUY" level with a "10 days prediction" higher than the close price. In our live trading room. I usually hold a position for 1-2 days and allocate no more than 5% of trading capital to any single trade.
I allocate less than 5% of my portfolio if I hold a position overnight. On average, less than 1% of the portfolio should be at risk if you hold a position less than one day. I personally look to enter a position at the predicted LOW (BUY) price or yesterday's close price. For Weekly Power Trader, my stop loss for stocks is 2% and my target gain is 2%. I target 75% accuracy using these signals.
Through the Weekly Power Trader service, we tie our Tradespoon Live Trading Room to manage the parameters of every trade. And we update our closed positions daily. The two platforms work seamlessly to provide our subscribers with the most robust trading experience available anywhere in the market today.
The beauty of our AI-driven system is that we are always equipped to bring new trades to our members. Trades in best-of-breed stocks and ETFs that are not yet recognized by the larger universe of traders. In just the past two weeks, our Weekly Power Trader members have profits on 13 out of 14 recommended trades.
We really pride ourselves on this kind of discovery process, to bring trades with very high probability risk/reward parameters to members throughout each week.
The consistent performance of our Weekly Power Trader service is just incredible. This stellar performance is made possible by being right on 85.57% of all trades with an average profit of 32.28% per trade. Retail investors will not find this kind of track record available at an affordable price anywhere in the marketplace for trading services.
Once you’ve become a member to any of our service – Weekly Power Trader or Aggressive Power Trader, I highly encourage you to view the instructional videos on how to best use your membership and participate in live weekly strategy roundtable workshops that are also archived in the event that they need to be viewed at a later time.
Traders seeking the most-timely directional trading strategies where over 85% of all trades are profitable should take action and come alongside the Yellow Tunnel community and make Weekly Power Trader and Aggressive Power Trader your go-to AI trading platform for no-excuses performance.
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Go to our website at www.yellowtunnel.com and make the Weekly Power Trader service your default trading system where the AI that powers my all-world, always thinking platform and make 2021 the best year on record for your trading portfolio.